Stock futures rally on strong jobs report

PolyaLesova

WilliamL. Watts

NEW YORK (MarketWatch) — U.S. stock futures rallied on Friday, erasing modest losses after data showed the American economy created more jobs than expected in November, and the unemployment rate fell to the lowest level since December 2008.

Nonfarm payrolls rose by 146,000 jobs last month, and the unemployment rate fell to 7.7% from 7.9%, the Labor Department reported.

In addition to the labor data, the preliminary December consumer- sentiment gauge from the University of Michigan and Thomson Reuters, due at 9:55 a.m., is seen edging back to a reading of 82.0 from 82.7.

Consumer-credit data for October are seen expanding due to growing student and car loans, the Federal Reserve is likely to report at 3 p.m.

Besides economic data, investors will continue to watch closely developments in Washington where the White House and Republicans are trying to reach a fiscal-cliff deal.

“Many investors continue to take a neutral view as they wait for the outcome of fiscal-cliff negotiations. Whether those investors will get the rally they’re hoping for, or whether success has already been priced in, is the key question,” said Rebecca O’Keefe, head of investment at Interactive Investor in London.

Wall Street posted a modest rise on Thursday, with analysts tying strength to expectations the fiscal cliff — heavy spending cuts and tax hikes due to begin taking effect on Jan. 1. — will be avoided.

European stocks turned higher, buoyed by the U.S. jobs report. Sentiment had been dented earlier after Germany’s Bundesbank on Friday sharply cut its forecast for 2013 growth but said the country’s labor market should remain relatively insulated ahead of a rebound in 2014. Read The Tell: Some bad news abut that German engine of growth.

Stocks in focus

Netflix Inc.
NFLX, -2.14%
shares will be in focus. The DVD-rental and streaming-media company said that the staff of the U.S. Securities and Exchange Commission is recommending a civil action against the company and its CEO because of a posting on a social-media site. Read about Netflix

Netflix

Palo Alto Networks Inc.
PANW, -1.33%
shares may be active in the premarket. Late on Thursday, the producer of computer-network- security technology reported a fiscal-first-quarter loss of 5 cents a share and adjusted earnings of 4 cents. Analysts surveyed by FactSet produced a consensus estimate for the quarter of profit of 3 cents a share.

Smith & Wesson Holding Corp.
US:SWHC
, the Springfield, Mass., gun maker, reported that fiscal-second-quarter net income jumped on 48% higher sales. The company also lifted its outlook for fiscal 2013 and approved a $20 million stock buyback.

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